Gold and silver are like no other currencies and no other commodities. The two monetary metals occur in nature worldwide and they do not corrode. Both metals are easy to trade, recognizable, divisible, portable, and rare — which makes silver and gold naturalmoney.

NO COINS FOR THOUSANDS OF YEARS

Histories of all great civilizations record the use of silver and gold to facilitate trade. Babylonians, Egyptians, Phœnicians, Persians, Assyrians, Harappans, Sumerians, Hebrews, Greeks, Chinese, and Romans all conducted trade with gold and silver. However, societies in the distant past did not use metals in coin form. According to archæology, there were no coins or denominations of monetary value for thousands of years.

Gold discs from the Indus Valley, c. 1800 B.C.

Early on, specific monetary values were not assigned to units of silver and gold. Instead, monetary units were measurements of weight. Money was the metal itself – kept in jewelry, rings, bars, and ingots.

Gold objects from Thrace.

THE ANCIENT MONETARY SYSTEM

Gold has always been money among rich and commercial nations. In the ancient monetary system, any form of silver and gold performed the function of money. International trade flourished because just about everyone determined the value of metals in the same way. Nations and tribes measured the value of un-coined gold and silver by placing the metal on one side of a balance and offsetting it with standardized weights.

In business transactions, merchants usually did not count the pieces of silver or gold; payments were made by weight. The only reason to add up the money was to make a rough estimate of the weight.

INTERNATIONAL WEIGHTS

Long before the art of stamping coins, the oldest civilizations carried on seamless trade by using equivalent units of mass to weigh money. The weight system for measuring the value of silver and gold was internationally integrated. The Sumerians calculated the value of metals by using the same denominations of weights as the Hebrews and Greeks used (TABLE near end).

Herodotus’s Table of Monetary Weights (484 to 425 B.C.) divided 1 talent into 60 minæ.*** More than 1,000 years earlier, the Babylonians divided 1 talent into 60 manehs. Convertible systems of weights were used by merchants from Tyre, Sidon, Nineveh, and Carthage — with astonishing consistency.

Hematite weights from Mesopotamia c. 1,700 B.C.A different weight system was for non-gold/silver things.

Between 1,792 and 1,750 B.C., the King of Babylon measured the value of money by the shekel (The Code of Hammurabi).*** Phœnicia used the shekel 1,000 years later. King Sennacherib used the shekel to weigh money in Assyria circa 700 B.C. Around the world, denominations of weights to evaluate gold and silver were often interchangeable in commercial exchange (until societies declined):

OLD CARAT SYSTEM OF WEIGHTS

Seeds and grains were used as standardized weights to weigh money on precision scales. Jewelers and traders used barley grains and the uniform seeds of carob trees as units of weight to determine mass. One grain taken from the middle of an ear of barley or wheat (well-dried) was used as a weight called a gerah:

1 gerah = 1 grain

A carob seed was used as a weight called a carat(Arabic qirat). The pod or seed of the carob tree has a consistent weight of four grains (gerahs):

4 gerahs = 4 grains = 1 carat

The carat system of weights measures mass, and also measures the purity of gold alloys.

CARAT (abbreviated ct.) is the spelling used in North America when referring to the weight of gemstones such as diamonds and rubies. With today’s technology, the calculation is extremely precise:

KARAT (abbreviated k or kt.) is the spelling used in North America when referring to the purity of gold. Pure gold is 24 karat. All 24 karat gold is bright yellow. Metal mixed with gold changes the color to pink, blue, orange, purple, green, and white.

Different geographical regions have various karat standards for gold jewelry:

India 22k

United States was 10k, now 14k or 18k

Far East 24k, Canton – Chuk Kam – min. 99% pure

Russia 9k

United Kingdom 9k – 18k

Mediterranean Europe 18k

Divide the number stamped on gold jewelry by 24 to find the % of purity:

TROY WEIGHT SYSTEM

The ancient Troy system of monetary weights probably got its name from the legendary city of Troy in Asia Minor (c. 3000 B.C.). Five thousand years ago, Troy was a powerful trading center because of its strategic location. Twenty-five hundred years later, the famous commercial hub had disappeared, but its monetary system lived on in ancient Rome and Troyes (a city in ancient Gaul).

METRIC WEIGHTS

A few hundred years ago, the metric system was introduced to simplify monetary weights (using increments of 10). However, the ancient Troy system is superior (grains and pounds divisible by 12).****

HALLMARK OF MILLESIMAL FINENESS

The system of millesimal fineness is a high-tech version of the carat system of weights. The Latin word for THOUSAND is “mille.” Millesimal fineness denotes parts per thousand of pure metal in a metal alloy – the purity of the metal.

Gold, silver, platinum, and palladium bars are either “cast” (poured) or minted like coins. The stamp on a bar is its “hallmark” of purity. The hallmark indicates who minted the bar and its millesimal fineness. If the mint is well-known and trusted, the numbers on the bar can be taken at face value. If the mint is unknown or is considered unreliable, the bar must be assayed.

Former standards of purity varied from current standards. The current minimal acceptable fineness for a London Good Delivery Bar [LGD] is 995/1000 gold. A London Good Delivery Bar weighs between 350 and 430 Troy ounces of 99.5% pure gold. A Standard Bar of silver weighs approx. 1,000 Troy oz, and has a minimum fineness of .999 (999 parts of pure silver per 1,000).

World standards for millesimal fineness of precious metals:

Gold .9950 to .9999

Platinum .995 to .999

Palladium .995 to .999

Silver .999

On the exchanges in London and New York, a Standard Bar of gold has a minimum fineness of 995 parts of gold per 1,000 and weighs approx. 400 Troy oz (12.5 kilograms: 12.5 x 32.151 = 401.8875 Troy oz). Standards of purity vary by geographical region: Dubai = 99.9% (“3 nines fine”): Iran = 99.5% (.995 fine). However, the international trend in gold trade is moving to bars that are “4 nines fine” (99.99% pure gold).

Of the 3,000 tons of gold mined each year, every ounce of Good Delivery bullion is PRE-SOLD. Since credit collapsed in 2007, most of the available physical gold has been travelling from the Western Hemisphere to the East: Shanghai, Hong Kong, Singapore, Dubai, Bangkok, VietNam, Turkey, etc. Bullion flows to the Shanghai Gold Exchange indirectly from the U.K. (L.B.M.A.) via Swiss refineries and Singapore. Recently, Russian buying has dwarfed purchases by China.

BRITISH POUND (L. PONDUS, pendo to weigh)

England’s POUND (-£-) was once a monetary unit of weight. A PONDUS (pound) was an old Roman weight used to weigh gold and silver on balancing scales. The symbol for the British Pound -£- is the first letter of Libra (abbreviated lb.). A LIBRA was the beam of a balance, connecting the scales for money. From the time of King Æthelberht (A.D. 550-616), the Anglo-Saxon Tower Pound (Money Pound) consisted of twelve ounces of silver.

The Anglo-Saxon penny called the SCEAT was England’s primary monetary unit (the silver penny was money in general). The penny above is from the reign of King Alfred (Ælfred, A.D. 871-899).

PENNYWEIGHT

In 1158, Henry II ordained the original STERLING penny. The weight of the “old penny sterling” became a universal unit of weight. PENNYWEIGHT is a Troy weight containing 24 grains (each grain being equal in weight to a dried grain from the middle of an ear of wheat). The symbol for the British penny is “d” after the Roman penny DENARIUS. The abbreviation of pennyweight is “dwt:” 20 dwt = 480 grains = 1 oz Troy weight.

Originally, all English, French, and Scots pennies contained one pennyweight of silver (a two-hundred-and-fortieth part of a pound). According to Dr. Smith, “the bankers, money-brokers, and notaries had large and accurate scales for this purpose over the continent of Europe.” Adam Smith,The Wealth of Nations.*

GOLD STANDARD

In 1729, Sir Isaac Newton, Master of the Mint, adopted the gold standard for Britain (fixing the price at £3 17 s. 10½ p. per Troy oz). Back then, the British pound and the U.S. dollar shared a standard exchange relationship (true gold standard until 1933). Paper pounds, paper dollars, and coins of gold and silver were interchangeable currencies for everyone. Except during times of war, bank deposits and notes -in dollars or pounds- could be converted into gold at $20.67/oz; U.S. $4.86 could have been exchanged for the gold pound below:

The gold pound (£1) is the Sovereign (from 1817); the gold content of the ¼ oz coin is .2354 Troy oz. When silver and gold freely circulated, silver and gold coins had standard exchange relationships. The gold pound was equivalent to 20 shillings or 240 pence (the sum value of 240 silver pennies). The British Pound Sterling was the global standard for sound money until the U.S. dollar became the reserve currency (United Nations Conference at Bretton Woods, 1944).

CONSTITUTIONAL U.S. DOLLAR

Originally, the word “dollar” signified weight (of silver).DOLLAR was the name for monetary units throughout the world (G. thaler, D. daalder, Dan. and Sw. daler, Sp. dalera, Russ. taler).** The dollar came to Colonial America from Bohemia. The Bohemian coin called the “thaler” contained 451 grains of silver.

When the American Colonies declared independence from England, they did not have the necessary silver and gold to fund the Revolution. The Continental Congress agreed to print paper currency to pay for soldiers, guns, bullets, etc.

In 1776, the Continental paper dollar was equal in value to one silver dollar (Spanish 8 Reales). By 1779, one thousand Continental dollars were necessary to buy one silver dollar (the dollar crisis reached 47% inflation per month):

The Constitution preserved the Republic and the integrity of the dollar: “No State shall… make any thing but gold and silver coin a tender in payment of debts….”Constitution of the United States of America, Article I, Section 10.

In 1792, coinage legislation under President George Washington fixed the dollar to gold in a relationship of 20 to 1 ( $20.67 per Troy oz). The Coinage Act defined a legal dollar:

From 1792 to 1971, the dollar was “as good as gold.” Paper dollars were 100% convertible to gold in foreign exchange until Aug. 1971. For about 150 years (until 1933), $1 was worth 1/20th of an ounce of gold; anyone could have had a $20 Gold Piece [below] for a $20 paper bill:

Banker “J.P.” Morgan believed gold alone is real money. The Titan of Wall Street testified before Congress: “Gold is money, and nothing else.” He told Congress that all other monetary instruments derive their value (credit) from gold. [Testimony of J. Pierpont (J.P.) Morgan before the “Bank and Currency Committee,” U.S. House of Representatives, Wash., D.C., Dec. 18 & 19, 1912.]

HISTORICAL GOLD-TO-SILVER RATIOS

Gold is more rare than silver and has always held a higher value. Over millennia, gold has commonly been fifteen times more valuable. Today, the price of gold is eighty times higher than the silver price. This 80-to-1 ratio is an aberration. Monetary history provides a record of the natural relationship of gold-to-silver.

According to monetary scholars, the ratio of gold to silver was 2½ to 1 in Egypt under Menes (Code of Menes c. 3100 B.C.); 12 to 1 when David was King in Israel (c. 1000 B.C.); 5 to 1 in ancient Syria; 10 to 1 at the time of Hezekiah (c. 678 B.C.); 13 to 1 in Athens until Alexander the Great set the relationship at 10 to 1 (c. 330 B.C.); 12-12½ to 1 in the Roman Republic; 8 to 1 in Japan; 4 to 1, then 10 to 1, and later 12 to 1 in China. In Europe -from the Greek Testament of the Bible to about 1492- the ratio averaged 10 to 1; and from 1492 until 1834, the average ratio was 15 to 1. Napoleon set the ratio at 15½ to 1; England set the ratio at 16 to 1; and in 1792, the U.S. Congress under President Washington fixed the ratio at 15 to 1.

“In the market of Europe… an ounce of fine gold exchanges for about fourteen ounces of fine silver. In the English coin, it exchanges for about fifteen ounces… In India, ten or at most twelve ounces of silver will purchase an ounce of gold… In China, the proportion of gold to silver still continues as one to ten, or one to twelve. In Japan, it is said to be as one to eight… because an ounce of gold will commonly purchase from fourteen to fifteen ounces of silver….” Adam Smith, LL.D., The Wealth of Nations, 1811.*

The gold-to-silver ratio for the entire world came close to historical norms in 1980, briefly touching 16 to 1. In 2011, the ratio was 38 to 1 and dropped to 30 to 1. The ratio of gold-to-silver is now 80 to 1. Take advantage of this anomaly.

Today, U.S. 90% silver [pre-1965] halves, quarters and dimes are traded by weight according to the “face value” of the coins. A full ‘bag’ is $1000 face value: 10,000 dimes[10¢], or 4,000 quarters[25¢], or 2,000 halves [50¢]. One bag of “junk silver” contains 715-720 Troy oz of pure silver. Big coins are less worn: a bag ($1,000 face value) of old silver dollars contains 765 Troy oz of pure silver.

NEW SILVER & GOLD AMERICAN EAGLES

The new U.S. silver dollar is the American
Silver Eagle (first issued in 1987).

Gold and silver coins are usually “alloys”(90% pure). The mixture of gold or silver with base metals strengthens coins for circulation. For example, the new American Eagle 1-oz coincontains 1 Troy oz of pure gold, but weighs 1.1 oz.

MONEY ACCORDING TO THE BIBLE

“And I bought the field, and weighed him
the money in the balances.” Jeremiah

Money is one of the main topics in Scripture. In the ancient world, most business was transacted with silver. The value of the silver was often determined by a standardized WEIGHT called a SHEKEL. When Sarah died(c. 1,860 B.C.), Abraham purchased a family sepulcher for his wife’s burial (in the field of Machpelah in Hebron). There in the land of Canaan, the Hittites used the same “shekel” that Abraham had used in the land of the Chaldæans to measure the value of gold and silver. (Abraham was originally from Ur of the Chaldees.)

“…and Abraham weighed to Ephron the silver… 400 shekels
of silver, current money with the merchant.” Genesis 23: 16

Later, Abraham sent his oldest servant back to Mesopotamia to search for a bride for his son, Isaac. When the servant found Rebekah at the well, he gave the bride-to-be gifts from the bridegroom.

“And… the man took a golden earring of
half a shekel weight, and two bracelets for her
hands of ten shekels weight of gold.” Genesis 24:22

The TALENT was a standardized WEIGHT used to weigh money in several Biblical accounts. The Hebrews reckoned by talents as we do by pounds. The Hebrew talent of silver (CICAR/ KIKKAR) was equivalent to 3,000 shekels (113 pounds, 10 ounces, 1 pennyweight, 10 2/7 grains Troy weight).** The word “talent” signifies weight or balancing scales. Gold and silver were weighed on a balancing scale called a TALANTON (ταλαντον).

“Just balances, just weights, shall you have.” Moses

TABLE OF WEIGHTS

A different table was used for non-monetary commodities.

1 bekah = ½ shekel = 10 gerahs

20 gerahs = 1 shekel

50 shekels = 1 maneh = 100 bekahs = 1,000 gerahs

60 manehs (minæ) = 1 talent = 3,000 shekels

1 talent of gold = 3,000 shekels of silver (cicar)

“A false balance is not good.” Solomon
“Ye shall have just balances.” Ezekiel

GERAH (grain, kernel, bean) was the smallest weight.

BEKAH (to break, to divide) was a fractional weight. “A bekah for every man, that is, half a shekel, after the shekel of the sanctuary, for every one that went to be numbered….” Exodus 38:24-26; c. 1491 B.C.

SHEKEL (sheqel, to weigh). A shekel weighed about 1/2 Troy oz — equal to 9 pennyweights, 2 4/7 grains, Troy weight (0.40212316622522 oz). In the Bible, a “piece” of silver was about a shekel’s weight. The shekel of the sanctuary was double the profane shekel. SHEKEL is the root of the British SHILLING.**

MANEH (number, part, portion) meant to number, to measure out, to weigh. This standardized weight was translated in the English Bible as “POUND.”

TALENT (circle, sum, a round number): The talent was the largest monetary weight, weighing about 125 pounds (avoirdupois**). Before his death, King David instructed his son Solomon:

“…I have prepared for the house of the Lord an hundred thousand talents of gold, and a thousand talents of silver….” I Chron. 22:14; 1017 B.C.

In Babylon, God NUMBERED the days of wicked King Belshazzar; “MENE, MENE” was written on the wall at his drunken feast. The depraved Babylonian king was “weighed in the balances, and found wanting.” [Daniel, Ch.5; c. 538 B.C.] Rembrandt van Rijn portrayed the “writing on the wall:”

That night, the Kingdom of Babylon was given to the Medes and Persians. The Persian Prince Cyrus (God’s “anointed“) freed Judæa to rebuild the Temple in Jerusalem. “Belshazzar” by composer Georg Friedrich Händel dramatized the fulfillment of prophecy concerning Cyrus [Isaiah Ch. 45; 712 B.C.].

THE ART OF STAMPING COINS

The Greeks and people influenced by the Greeks in Asia Minor started using coins as early as the eighth century B.C. According to Herodotus, the Lydians were the first to mint coins.*** Persia began using coinage about 500 B.C. It is estimated Carthage, Sidon, and Tyre started using coins sometime between 425 and 400 B.C.

According to Herodotus, Aeginawas the site of the first European mint. The silver mines on the island of Siphnos supplied the raw material for great numbers of Aeginetan staters from the 6th century B.C. The Aeginetan mint used Babylonian and Phœnician weights as standards.*** Three Attic AUREI were equal to one Homeric gold talent. Coins bore the likenesses of rulers and gods; but did not specify monetary values until much later.

Based on the COINS of Aegina, Asia, Africa, Greece, Magna Græcia, and Sicily, the weight and purity of the talent can be reduced to three standards. The Romans had a great talent and a little talent. The weight of the Attic talent contained 60 Attic minæ or 6000 Attic drachmæ (equal to 56 pounds, 11 oz, 17 1/17 grains Troy weight). The DRACHMA (dram.) was a weight equivalent to an eighth part of 1 oz (56½ grains Troy weight).**

The Romans had no coined money before King Servius Tullius began minting coins between 575 and 535 B.C.* Until that time, rude bars of silver, bronze, and gold (without stamp) performed the function of money. One PONDO (pound) was divisible by twelve: 12 TROY OZ = 5,760 GRAINS = 1 TROY POUND. The silver coins above were units of WEIGHT (Roman Republic DENARII, c. 211-41 B.C.).

SOMETHING NEW.
COINS with ASSIGNED MONETARY VALUES

The shekel became a coin denomination, rather than a weight, during the Second Temple period in Israel. The Maccabees and the Hasmonean Dynasty produced coins impressed with stamps indicating weight and fineness of the metals beginning between 141 and 110 B.C. (coins rarely had dates). In Jerusalem, Israelites were required to pay a Roman tax with Roman coins (depicting Roman gods), but offered Hebrew coins in the Temple.

Coins with specific monetary values became the norm with the advent of the Roman Empire. In 27 B.C., 1 AUREUS = 25 DENARII; 45 AUREI = 1 LIBRA (pound).A public stamp affixed to coins (Signatum) was the government’s guarantee of purity and weight. As the Roman Empire declined, the pure silver DENARIUS was gradually debased to only 2% silver. Circus Maximus model:

Sweden 10 Kronor .1296 oz 20 Kronor .2593 oz

Switzerland 10 Franc .0933 oz 20 Franc .1867 oz

Turkey 100 Piastres (kurush) .213 oz

END NOTES

* Adam Smith, LL.D., An Inquiry into the Nature and Causes of The Wealth of Nations (Of the Origin and Use of Money; Variations in the Proportions between the respective Values of Gold and Silver), Harvard College Library, Vol. 1, pp. 16, 30, 150, 153,178, Eleventh Edition printed for Oliver D. Cooke, Hartford, 1811.

** Definitions of monetary terms by Dr. John Arbuthnot are from a facsimile edition of Noah Webster’s 1828 American Dictionary of the English Language (permission to republish granted to FACE, Chesapeake, VA by G. & C. Merriam Co., 2016). In 1828, “MONEY” and “MINT” were essentially the same word.

*** HERODOTUS: Being Parts of the History of Herodotus by John S. White, LL.D., Copyright by G. P. Putnam’s Sons, The Knickerbocker Press, New York and London, 1884.

**** “Reports in Reference to the Adoption of the Metric System,” Secretary of the Treasury to the Committee on Coinage, Weights, and Measures, House of Representatives, Government Printing Office, Washington, 1878 (Library of the Univ. of Michigan).

Creating Economic Order – Record-keeping, Standardization, & Development of Accounting in Ancient Near East, by A. Mederos and C. C. Lamberg-Karlovsky, Institute for the Study of Long-term Economic Trends, International Scholars Conf., Ancient Near Eastern Economies, Vol. IV, British Museum, Nov. 2000.